Domestic steel producers will continue to focus on exports on the back of increased competitiveness in the global market amid fluctuating demand scenario, industry officials said on Tuesday.
“Indian steel has become more competitive in the global market and since a favourable export environment has emerged, exports are expected to remain strong in coming months,” Sanak Mishra, secretary general and executive head of Indian Steel Association, said.
As per Joint Plant Committee data, steel exports more than doubled to 8.24 million tonnes in FY17 from about 4 million tonnes in the corresponding period last year. Production too was 11 per cent up at 101.27 million tonnes on the year-on-year basis.
Tata Steel, Bhushan Steel, JSW Steel, Essar Steel, Jindal Steel & Power, state-owned Steel Authority of India and Rashtriya Ispat Nigam are some of the top producers of the alloy in the country.
Delhi-based Bhushan Steel said it has garnered over 30 per cent of its total revenues from exports in the March quarter. The company is of the view that domestic demand in the steel sector would remain between 6-7 per cent and is unlikely to breach the double-digit mark in FY18.
“Local steel demand keeps fluctuating and hence we would continue to focus on exports for some time,” a company official with Bhushan Steel told Business Standard.
Debt-laden Bhushan Steel saw its loss widen to Rs 734.04 crore in December quarter as against a loss of Rs 693.60 crore in the corresponding period last year even as net sales rose 47.12 per cent on year-on-year basis to Rs 3611.13 crore in the period under review.
State-owned Steel Authority of India has chalked out a plan to broaden its export basket as it aims to expand overseas sales to 10-15 per cent of its total production.
The company is targeting to tap the exports market with twin objectives of enhancing its global standards of competitiveness and setting industry benchmarks in technological advancements, it said.
Industry officials were also of the view that the surge in steel exports could be attributed to barriers imposed by other countries against cheap Chinese goods and stability in the price of coking coal — a key raw material used in the making of the commodity.
Though steel companies plan to continue focus on exports, most see domestic demand also picking up as government lays thrust on infrastructure development.
“We expect domestic demand to go up more strongly in the second half of the year as government spending will increase towards announced projects,” said Jayant Acharya, director commercial and marketing at JSW Steel. “As of now, there is pick up in demand in auto segment."
Select domestic steel producers such as Essar Steel continue to remain focused on domestic market sales, while JSW Steel is striking a balance between the two markets.
“Essar Steel predominantly focuses on the domestic market. It caters to the niche product requirements of its overseas customers after fully meeting the domestic requirement. There is no change in our strategy. Meeting the domestic requirement to the extent of 100 per cent is always our objective,” the company spokesperson informed via email.